Is multi-brand (Alphabet) out-pacing single brand (Apple)?

After a strong rise of revenue and earnings in the Google parent company Alphabet is passed by after trading on Monday on the iPhone maker Apple and went up to the most valuable publicly traded companies in the world. The alphabet shares shot up by more than eight percent in the amount, the market value rose to about 570 billion dollars. The market capitalization of the recent exchanges Champions Apple has been overtaken. With the recent announcement alphabet stock value raced above Apple’s. This came as a surprise, but it was not unexpected for the academic world.

Alphabet investors’ were positively surprised with its quarterly figures. From October to December 2015, the surplus increased year on year from 4.68 to 4.92 billion dollars as the company announced after US market close on Monday. Revenue rose 18 percent to $ 21.33 billion.

„Our very strong revenue growth in Q4 reflects the vibrancy of our business, driven by mobile search as well as YouTube and programmatic advertising, all areas in which we’ve been investing for many years. We’re excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people,“ said Ruth Porat, CFO of Alphabet.

The figures were awaited with particular anticipation, since it was the first Annual Report in the new group structure. The Group had announced the conversion to Alphabet Holding last August and completed in October. The recent Google shareholders became shareholders of the new holding company.
The advertising revenues of the operating units rose year on year by 17 percent to $ 19.08 billion, particularly strong the video platform YouTube and the mobile operating system Android. These platforms are important reasons for the strong growth in business with advertising on mobile devices like smartphones and tablets.
In many industries, when maturity has reached a certain point, the successful companies are trying to cover various segments of the market with specific brands. Such developments we have seen in the auto industry, in the food industry, at airplanes and now it is happening the Internet business.

Google’s management made a very consequent decision to create a holding company and is managing its subsidiaries and their brands separately. Procter & Gamble developed the concept of conscious brand management for the consumer industry in the 1930s. Daimler applies multi-brand concepts for their trucks business with Mercedes-Benz, Freightliner, Wester Star, Fuso and BharatBenz and Mercedes-Benz, AMG and Smart for the passenger cars. The industrial giant Caterpillar has more than 30 brands.

Apple is also managing more brands, one of them is the headphone company Beats Electronics, but they are not as focused on the multi-brand appearance then Google. Is this a mistake? Future will tell. Current research indicates that with multi-brand management, if it is done properly many more corporate goals could be achieved.